Russia's plans for Moscow gas summit in disarray

16:47, 16 January 2009
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Sarkozy announced he was not...

Russia`s plans for a weekend gas summit were thrown into disarray Friday, as the Ukrainian president hastily met European leaders in Kiev and French President Nicolas Sarkozy announced he was not going to Moscow, according to AP via Yahoo! News.

Ten days into a natural gas shortage that has left over 15 European nations scrambling for alternative sources of energy, Russia and Ukraine are still deeply divided over what price Ukraine should pay for gas this year. With no solution, no Russian gas was heading to Europe over Ukrainian pipelines.

President Viktor Yushchenko`s talks in the Ukrainian capital with his Slovak counterpart, the prime minister of Moldova and Poland`s foreign minister were sure to irritate Russia. Ukraine doesn`t oppose the idea of a summit, but insists it not be held in Moscow.

Ukrainian Prime Minister Yulia Tymoshenko and Russian Prime Minister Vladimr Putin are still meeting in Moscow on Saturday, but this appears to be separate from Russian President Dmitry Medvedev`s call for a full summit.

Czech Prime Minister Mirek Topolanek, whose country hold the rotating EU presidency, said Czech Industry and Trade Minister Martin Riman would go to Moscow, but France said Sarkozy won`t.

"We consider that the conditions for a summit are insufficient," the French Embassy in Moscow said.

The EU said weekend talks are the "last and best chance" to settle the dispute and threatened to reassess relations with Russia and Ukraine if there was no resolution by Monday, but the comments appeared to have little impact.

The sparring over location and attendance at gas talks underlined Russia`s and Ukraine`s determination to portray themselves as the wronged party in the dispute.

Russia stopped shipping gas to Ukraine for domestic use on Jan. 1 when the countries could not agree on a price, then accused Ukraine of siphoning off Europe-bound gas and turned off the taps entirely on Jan. 7.

Some 20 percent of the gas consumed in Europe comes from Russia via Ukrainian pipelines. The cutoff has forced thousands of factories in eastern Europe to cut production or even close and left countless residents shivering in the grip of winter.

Bulgaria, one of the hardest-hit nations, was seeking emergency energy deliveries from Greece and Turkey, while Serbia and Hungary reported higher smog counts from the switch to using dirtier fuels in power plants.

For three days this week, Tuesday through Thursday, Russia resumed sending gas into Ukraine after both agreed to have EU monitors check gas flows, but the gas did not reached its destination. Russia says Ukraine is blocking shipments to European consumers. Kiev says Russia wants to send gas along a route that would disrupt supplies to Ukrainian consumers.

There was no indication that Russia tried to send any gas on Friday.

Ukraine is also demanding that Russia supply the so-called "technical gas" needed to power compressors to push gas west toward Europe. Ukraine`s sprawling, inefficient pipeline system uses a substantial amount of technical gas, so the issue involves several million dollars a day.

Previously, Russia insisted that Ukraine pay for that gas, or accused it of stealing the gas. But on Thursday, Putin suggested that a European consortium instead buy the technical gas from Russian gas monopoly Gazprom.

Gazprom deputy CEO Alexander Medvedev said Friday that Italian gas firm Eni SpA has already agreed to join Gazprom in creating the consortium — and he expected Germany`s E.On Ruhrgas and Gaz de France also to join shortly.

Gazprom would sell the technical gas at $450 per 1,000 cubic meters, roughly what European countries now pay for gas, Medvedev said.

Putin was to meet again Friday with Eni CEO Paolo Scaroni, this time in Berlin.

The Ukrainian natural gas company Naftogaz said it would be happy to discuss this proposal.

Russia`s demand that Ukraine pay $450 per 1,000 cubic meters of gas in 2009 — more than twice what it paid last year — is one of the main economic issues in the dispute, which also involves a struggle for dominance between the two uneasy neighbors.

Russia and Ukraine have been at odds since the 2004 Orange Revolution, in which massive street protests forced the annulment of presidential elections nominally won by a Kremlin-backed candidate.

Yushchenko won the rerun of the election and his avid push for Ukraine to join NATO and the European Union has angered Moscow.

 

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